Statoil, UMaine will have more power together

Mario Moretto | BDN

Mario Moretto | BDN

VolturnUS, the first-of-its-kind wind turbine, designed and built at the University of Maine, became the first grid-connected offshore wind turbine in the Americas to provide electricity to the power grid recently.

July 2, 2013 12:29 pm

Amid the political furor over legislation to allow the University of Maine to compete for an offshore wind energy pilot project after bidding closed, one point has been emphasized over and over: the importance of competition. “We should all agree that our flagship university deserves the opportunity to compete on a level playing field,” Gov. Paul LePage said in a press release June 20.

But competition, while usually healthy for driving innovation, might not be the best option in this instance where the university will likely bid on a project for which energy giant Statoil North America has already secured terms of agreement. When considering the future of the offshore wind energy economy in Maine, the future of wind energy technology in the world and the university’s continued success at graduating engineers who become leaders in the renewable energy field, the university and Statoil should collaborate.

Last week, the Maine Legislature approved legislation — that LePage’s administration proposed — to reopen bidding on the offshore wind energy pilot project. Though the Maine Public Utilities Commission had not awarded a contract to Statoil for its proposed $120 million Hywind Maine project, the contours of its contract have already been approved. We can’t condone this governmental backtracking, which is a sloppy way to cultivate a complex, expensive, emerging industry. It’s not fair to any company to change the process as it’s ongoing.

We also recognize that the harm to Statoil has been exaggerated. Maine Senate Democratic leaders argued that the legislation would jeopardize Statoil’s investment when in reality the company doesn’t yet have a finalized contract, the necessary permits or the financing to deploy four 3-megawatt wind turbines off Boothbay Harbor. It’s waiting to see if it receives a large grant from the U.S. Department of Energy next year, and the company’s initial approval from the PUC improves its chances of securing that money. The University of Maine is after the same federal grant, and opening up a second round of bidding to allow the university to potentially secure a term sheet from the PUC would make the university more competitive.

However, the legislation only opens a small window: UMaine must finalize its proposal for the offshore wind energy project and submit to the PUC by Sept. 1, and its proposal must demonstrate technical and financial capacity. It will be a challenge for the university to pull together a proposal in two months, and it can’t finance such an expensive power generation project alone. It must partner with private businesses. It should consider Statoil.

The two entities have worked with each other in the past. By joining on the pilot project now, they could combine resources, leverage federal funding together, possibly pursue multiple turbine structure technologies and take advantage of UMaine’s state-of-the-art offshore wind laboratory at the Advanced Structures and Composites Center.

The university’s and Statoil’s demonstration projects were two of just seven, out of more than 70 nationwide, to be selected by the federal government in December 2012 for $4 million each to develop breakthrough offshore wind energy technology. That was the first phase. Now both are competing for the second phase of the grant: Of the seven projects, a maximum of three will receive up to $47 million each over four years to manufacture and deploy the technology they’ve created. It’s unlikely the federal government will award the money to two Maine projects. Statoil and the university should determine the best way to partner to increase their chances of getting the funding.

The state and federal governments have already devoted millions of dollars to both efforts with a goal of making offshore wind technologies more cost-competitive and reliable. What happens off the Maine coast will inform the future of wind energy development across the world. Statoil has the experience and equity, having launched the world’s first full-scale floating wind turbine off the coast of Norway. UMaine has a world-class research facility and a talented team: It was the first in the Americas to provide electricity to the power grid from an offshore wind turbine when it launched a floating prototype June 13. It would be unfortunate for one to fail when they have an opportunity to succeed together.

The politics surrounding the legislation have been messy. LePage has never hidden his opposition to the Statoil project, arguing it will force Maine residents and businesses to pay above-market electricity rates — even though planning and launching the turbines would inject millions of dollars into Maine’s economy, particularly if the technology is proven viable for the long-term. And he raised eyebrows by supporting the university’s research endeavors when in May 2012 he vetoed a $20 million bond for research and development that would have advanced the same research. To make matters more complicated, the university didn’t propose the legislation to reopen bidding, placing it in an awkward position with its former — and, we hope, future — partner in Statoil. UMaine and Statoil work to create new solutions to old problems every day. They should find a way to overcome their challenges together.